Wennemer slams inflexible German labour market

The head of Continental AG slammed the German government on Monday for failing to tackle an inflexible labour market and said it was being forced to expand in cheaper locations abroad. “The decisions for the next two or three years have already been made. The government and the unions can no longer do anything about it — factories will be built elsewhere”, Chief Executive Manfred Wennemer told the Süddeutsche Zeitung.

Wennemer criticised the 35-hour working week, which is standard in the west of the country, saying a 43- or 45-hour week would be necessary to save sites in Germany, and said firms had to wrestle with too many bureaucratic hurdles to create jobs. “Every hour less that German workers work means that it’s in our interest to move (out of Germany) a little bit quicker,” he was quoted as saying. He dismissed the German government’s economic reform package, which was given final approval by parliament this month and which includes a revamp of the Federal Labour Office, as “small consensus steps,” which did not go far enough.

The world’s fourth-largest tyre maker has been closing factories and investing in eastern Europe over the past three years in a bid to cut costs in a weak auto industry. The company raised its outlook for 2003 this month, saying it expected earnings before interest, tax and amortisation (EBITA) of significantly more than 750 million euro on the back of growing demand for its electronic systems. Wennemer said the firm would decide in the first half of 2004 on the location for a new tyre plant in South America.